Re: Whether the "fraudulent filing" provisions
of the Business and Commerce Code apply to
those transactions excepted under section 9.104
thereof (RQ-0154-JC)

Dear Senator Harris:

You have requested our opinion as to whether the "fraudulent filing" provisions of section
9.412 of the Business and Commerce Code apply to those transactions excepted under section 9.104.
For reasons that appear below, we conclude that they do not apply.

Your letter refers to sections 9.104 and 9.412, which are found in the present version of
chapter 9 of the Business and Commerce Code and are effective until July 1, 2001, as well as to
sections 9.109(d) and 9.5185, which are part of an amended and renumbered chapter 9 that will take
effect on July 1, 2001. On July 1, 2001, the provisions in section 9.104 will be found in section
9.109, and the provisions in section 9.412 will be found in section 9.5185. See Act of May 17, 1999,
76th Leg., R.S., ch. 414, §§ 1.01, 3.10, 1999 Tex. Gen. Laws 2639, 2650, 2656, 2711, 2750. In this
opinion, we refer to the present version of chapter 9.

Section 9.412 of the Business and Commerce Code provides, in relevant part:

(a) A person may not intentionally or knowingly present for
filing or cause to be presented for filing a financing statement if the
person knows that the financing statement:

Section 9.412 was first enacted in 1995(1) in response to a wave of spurious court filings by
individuals who were attempting to challenge the sovereignty of the government of the State of
Texas. See Tex. Att'y Gen. LO-98-016 (county clerk required to provide notice if fraudulent filing
is suspected); see also Tex. Att'y Gen.
DM-389 (1996). The bill analysis for the 1997 amendment
to section 9.412 declares:

[Individuals and organizations] have filed fraudulent judgment liens
issued by so-called "common law courts" and fraudulent documents
purporting to create liens or claims on personal and real property with
the secretary of state and many county and district court clerks
throughout the state. Many of the filings have been against the State
of Texas and public officers and employees, as well as private
individuals. These filings have clogged the channels of commerce
and have amounted to harassment and intimidation of both public
officials and ordinary citizens. This bill provides both civil and
criminal remedies for those against whom such fraudulent filings
have been made.

Section 9.104 of the Business and Commerce Code, styled "Transactions Excluded From
Chapter," provides that "t]his chapter does not apply" to thirteen kinds of transactions described in
the section. You ask whether section 9.412 applies to these thirteen transactions. The answer is
clear. No part of chapter 9 is applicable to a transaction listed in section 9.104. Section 9.412 is a
part of chapter 9. As a result, section 9.412 is not applicable to a transaction listed in section 9.104.

We conclude that the "fraudulent filing" provisions of section 9.412 of the Business and
Commerce Code do not apply to any transaction listed in section 9.104 thereof.

S U M M A R Y

The "fraudulent filing" provisions of section 9.412 of the
Business and Commerce Code do not apply to any transaction listed
in section 9.104 thereof.